Mexico’s Finance Ministry expects Petroleos Mexicanos to pay debt coming due in the first quarter without government help, according to people with knowledge of the situation.
(Bloomberg) — Mexico’s Finance Ministry expects Petroleos Mexicanos to pay debt coming due in the first quarter without government help, according to people with knowledge of the situation.
After providing the oil company with financial support in recent years, the Finance Ministry now wants Pemex to foot the bill itself unless it doesn’t have enough cash to do so by the end of the quarter, one of the people said. They all asked for anonymity because the discussions between Pemex and the government aren’t public and the situation could change.
The talks are taking place after Pemex Chief Executive Officer Octavio Romero said in December that the government of President Andres Manuel Lopez Obrador could resume its practice of paying the company’s debt amortizations in early 2023.
Mexico’s Finance Ministry declined to comment. Pemex didn’t immediately respond to a request for comment.
Pemex is the world’s most indebted oil major, with financial obligations of $105 billion by September 2022. It is under enormous financial strain as the Mexican government wants it to halt oil exports and invest in loss-making refineries — all of which while the company fails to stem long-term production declines.
Read More: Billions in Oil Riches Vanish in Latin America as Pemex Stumbles
It reported a net loss of 52 billion pesos ($2.67 billion) for the third quarter of last year, while US competitors Exxon Mobil Corp. and Chevron Corp. amassed a combined net income of more than $30 billion amid a rally in international oil prices.
Mexico’s oil driller has 188 billion pesos in amortizations due in 2023 and must maintain zero net indebtedness in real terms, it said in its annual financing plan. Refinancing debt could include but won’t be limited to bank loans, bond issuance, direct financing or financing guaranteed by export credit agencies.
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